Commercial operations at the Medgaz natural gas pipeline linking Algeria to Spain started Friday, Algeria's official news agency said.

The new pipeline from Algeria--which is already Europe's third-largest gas supplier--is seen as a key route to diversifying import sources away from Russia.

Algerie Presse Service said Friday that commercial operations at the EUR900 million pipeline had started Friday.

GDF Suez (GSZ.FR) had confirmed earlier Friday that commercial operations were set to start Friday but declined to comment further when contacted subsequently.

Medgaz didn't return a request for comment and couldn't be reached Friday afternoon.

Algeria's energy minister, Youcef Yousfi, had previously said the pipeline's commercial start-up, which has been delayed for more than a year amid technical issues, was due in April.

The 1,050-kilometre route will carry 8 billion cubic meters a year, with a possible increase to 16 billion cubic meters in the medium term.

State oil giant Sonatrach owns 36% in the pipeline. Iberdrola SA (IBE.MC) and Cepsa (Espagne) each have 20% and Endesa SA (ELE.MC) and GDF Suez, 12% each.

-By Benoit Faucon and Geraldine Amiel, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com